Bucks County-based ProPhase Labs Inc. will sell its popular Cold-Eeze cold remedy for $50 million to a subsidiary of Mylan N.V.
Mylan N.V., a global pharmaceutical company headquartered in Canonsburg, makes the EpiPen.
The deal is expected to close in the first quarter of 2017, subject to approval of ProPhase’s stockholders and other conditions, ProPhase said Monday.
“We view the sale as win-win,” said Ted Karkus, CEO of ProPhase Labs Inc.
“In the case of Mylan, it gives them the opportunity to leverage their infrastructure. Cold-Eeze has a high gross profit margin and should serve them well,” Karkus said.
“From the point of view of ProPhase, it provides us with significant liquidity, which will give us the ability to build our manufacturing facility and develop a new line of dietary supplements still under development and the ability to expand the potential of other acquisitions and to continue to build shareholder value for the longterm.”
ProPhase is retaining ownership of its manufacturing plant and business in Lebanon and its headquarters in Doylestown. The company is developing three dietary supplements for men that enhance libido, prostate health and energy, Karkus said.
As part of the deal, ProPhase’s subsidiary Pharmaloz will enter into a manufacturing and supply agreement with Mylan to make the Cold-Eeze product line. The lozenges, chewables, sprays and other forms are made with zinc gluconate, which is clinically proven to significantly reduce the duration of the common cold.
ProPhase’s executive officers and directors, who hold 24 percent of the company’s stock, voted for the sale.
ProPhase reported net sales of $2.8 million for the three months ending June 30, 2016, compared to $2.2 million for the same period in 2015.
The company’s sales are largely from its over-the-counter health care and cold remedy products, which are highly seasonal.